Farmer's Weekly (South Africa)
Potential farm buyers must ‘proceed with care’
The market for farms in South Africa has attracted more and more interest over the past few years, especially since the outbreak of the COVID-19 pandemic, and with many people embracing remote working, the appeal of farm life has grown exponentially.
This was according to PJ Veldhuizen, a specialist commercial attorney in Cape Town.
“The problem is that the number of disputes arising from such transactions has also increased exponentially, mainly because the buying and selling of a farm is a much more complex affair than acquiring a normal residential property,” he added.
Veldhuizen said that aside from the usual checks and balances that come with an agreement of sale, buyers and sellers needed to proceed with extraordinary care when entering into contracts regarding farmland and working farms.
From several recent transactions, it was apparent that buyers, sellers and agents were often unaware of the complexities of the process, as well as the associated businesses that might be connected to them.
“There’s a lot to consider when buying or selling a farm. We recently assisted in the purchase of a game farm and, following findings during our due diligence process, we had to attach a four-page schedule of specific warranties that will apply to the successful transfer,” he said.
Among the many examples that Veldhuizen listed, such as water and farmworker tenure rights, were the ‘basic’ assurances that the seller was not party to a dispute with any neighbour, or that there were no pending land claims registered to the property.
He said buyers needed to check whether any servitudes applied and what water rights the farm had been granted; that zoning rights and permits were in order; and whether the farm was under any environmental or heritage limitations. Tenure rights of farmworkers were often overlooked and not disclosed; these needed to be identified in the due diligence, he added.
Veldhuizen said financial modelling needed to be undertaken by accountants familiar with farming operations. For example, ‘fair value adjustments’ in financial statements needed to be scrutinised by an accountant who understood the concepts.
Buying a genuine farming operation was not for the faint-hearted, and even the purchase of a ‘gentleman’s farm’ needed to be thought through, and called for careful consideration and in-depth investigation.
Bothaville estate agent Charl Thompson warned against emotional purchases, and said that beautiful scenery did not make for a successful farm.
“I have to warn potential buyers who are not experienced in agriculture to tread carefully. Owning land does not make one a farmer. I have often come across townsfolk investing their money in land and farming, only to lose it all.” – Annelie Coleman
While the outbreak of avian influenza among wild birds seems to be subsiding in the Western Cape, poultry farmers need to remain on high alert to protect their flocks against the disease.
Dr Laura Roberts, state veterinary epidemiologist, said the recorded number of wild birds dying from the disease had decreased from over 750 at the peak of the outbreak towards the start of October, to about 65 a day towards the end of November.
Deaths were first observed in the Berg River district, from Velddrif to Paternoster, and later also in the Overberg region and the City of Cape Town Metropolitan Municipality, but largely along the Western Cape coastline, with the bulk of the deaths reported on Dyer Island in the Overberg region. Endangered Cape cormorants were the worst affected.
Roberts said avian influenza outbreaks on poultry farms in the province, nevertheless, had remained at relatively low levels during this period, with only one case reported per month for the past three months.
Roberts sent regular bird flu updates to poultry farmers in the province to keep them informed about hotspots and risks, and encouraged farmers to keep their poultry houses enclosed to prevent contact with wild birds, and to practise good biosecurity measures.
Tawfeeq Brinkhuis of Chamomile Farms said poultry farmers in the Western Cape were highly concerned about the potential spread of bird flu from wild birds to their poultry.
His advice was for farmers to minimise their risks by allowing only dedicated people, who had not had contact with possible contaminants and understood the risk, into their production area.
Furthermore, these people needed to sanitise themselves before entering the production area and wear dedicated clothing to reduce the risk of introducing diseases into the poultry houses.
Trucks also needed to be sanitised and kept as far away from the production area as possible, especially if they were being driven from one poultry farm to another. In addition, farmers needed to re-evaluate their production systems to identify and address potential hazards.
“Look out for [openings] in the [poultry] houses where wild birds can enter, or open water sources that can be contaminated by dead birds,” Brinkhuis advised.
He added that farmers with free-range chickens should preferably keep their birds indoors for now.
Anton Bredell, Western Cape MEC for local government, environmental affairs and development planning, recently issued a statement asking members of the public to avoid affected areas, and urged them not to attempt to assist, transport, or treat sick birds, as this could spread the disease to other areas. – Glenneis Kriel
The Milk Producers’ Organisation (MPO) has welcomed the recent opening of the new Sundale Schreiber slice-on-slice cheese processing factory at the East London Industrial Special Economic Zone (ELSEZ).
“The majority [70%] of sliced cheese was imported in the past. This factory opens up the market,” Fanie Ferreira, acting CEO of the MPO, said.
ELSEZ spokesperson Sibusiso Ralarala said in a statement that local company Sundale Dairy had joined forces with multinational cheese producer Schreiber Foods to expand and reinvest R91,7 million in the existing facilities.
“Schreiber is the global leader in the production and distribution of processed cheese, cream cheese and yoghurt,” he said.
Eastern Cape Premier Oscar Mabuyane, who attended the opening, said that investments such as this would chip away at the unemployment rate, as they had multiplier effects across the entire agricultural value chain.
“We are, however, missing out on opportunities that could lead to more job creation in the agricultural value chain, as we’re not [improving] enough on our agricultural produce. This isn’t a matter of the lack of policy, but rather a matter of the failure to implement policies that favour beneficiation.”
Ferreira said the facility’s location was of strategic importance to the primary dairy industry, as one-third of all dairy farmers hailed from the Eastern Cape, and about 30% of the country’s milk (812 million litres a year) was produced in the province.
Mabuyane agreed, stating that the province had enough milk not only to support the new Sundale Schreiber operation, but also to ensure that the localisation of slice-on-slice cheese took place in the Eastern Cape.
Simphiwe Kondlo, CEO of ELSEZ, also welcomed the investment, saying that it would contribute towards the deepening of the agroprocessing value chain and lead to the diversification of the sector’s industrial production. At the event, Sundale Dairy CEO Pierre van Rensburg said the Sundale Schreiber facility was set to create 100 additional jobs over a period of five years, with 40 of those already activated. The facility would focus on supplying quick-service restaurants. – Susan Marais
Following a year of protests, Prime Minister of India Narendra Modi’s repeal of three controversial laws pertaining to farmers has been widely welcomed.
Since November last year, thousands of farmers have been encamped on the outskirts of the national capital territory of Delhi in protest against these laws, with dozens dying due to heat, cold and COVID-19.
According to BBC News, farmers maintained that the laws would have allowed the entry of private players into the farming sector, which would have severely affected their incomes.
However, Indian government ministers had steadfastly insisted that the new legislation benefited farmers, and had ruled out the possibility of repealing them.
While farmers’ unions were welcoming this announcement “as a huge victory”, industry experts said the upcoming state elections in Punjab and Uttar Pradesh, both with large farmer populations, could have forced the decision.
The announcement also came on a day that Sikhs, the dominant community in Punjab, were celebrating the anniversary of the birth of the founder of Sikhism, Guru Nanak.
One of the country’s most prominent farmer leaders, Rakesh Tikait, stressed that the protest movement would be disbanded only after the government officially repealed the laws in the winter session of parliament.
Opposition parties also welcomed the decision, with Congress Party leader Rahul Gandhi saying the repeal of the laws was a victory against injustice. – Staff reporter